Legislative Action
Pace Protects Pensions
Latest News!
On Monday April 25, 2011 the House of Representatives voted 60-30 with 4 absent and not voting to approve the original version of HB1134, without the teacher tax. This bill was the work of the NDEA, NDCEL, NDRTA, and NDSBA in conjuntion with the TFFR Board. The bill will now go to the Governor for his signature. See how your Representative voted on the final version of the bill here.
Thanks for all of your hardwork and engagement this session we couldn't have kept a safe and secure retirement for all educators intact without your efforts!
Welcome to the Pace Protects Pensions (PPP) Website. This website will provide you with updated information about the ongoing pension discussions and encourage you to get involved to protect your pension. The easiest and quickest way to do this to donate the the NDEA PACE Fund today!
As a result of the forecasted funding shortfalls, the North Dakota Legislative Assembly, the Teachers' Fund for Retirement (TFFR) Board of Directors, and the ND Public Employees' Retirement System (NDPERS) Board of directors worked together to find ways to provide a retirement benefit to North Dakota public educators. On April 10, 2010, the NDEA Representative Assembly adopted the following two (2) resolutions in regards to the TFFR and NDPERS proposals (Click here for TFFR or here for NDPERS).
The NDEA Representative Assembly also passed four (4) principles in the NDEA Legislative Agenda. These four (4) NDEA Principles that are being advocated during TFFR and/or NDPERS discussions to find acceptable solutions.
1) Preserve the defined benefit for current and future members.
2) Avoid drastic benefit changes
3) Minimize member contribution increases.
4) Maintain the current multiplier.
TFFR Specific:
What changes does the final version of HB1134 make to TFFR?
HB1134 (study bill 54)- is the TFFR proposal to restore the fund back to a healthy funding status. The TFFR Board passed bill includes six changes to the current plan. The six changes are:
1) It protects members within ten (10) years of retirement as of July 1, 2013. These individuals will not be affected by the unreduced and reduced retirement benefit eligibility changes outlined in sections 3 and 6 below.
2) The proposal increases all member and employer contributions by two (2) percent each starting July 1, 2012 and than another two (2) percent each starting July 1, 2014. This constitutes a total increase of eight (8) percent in increased contributions.
-A visual representation of the increases looks like this:
7/1/2010 7/1/2012 7/1/2014
Employer 8.75% 10.75% 12.75%
Member 7.75% 9.75% 11.75%
3) It changes all members from the Rule of 85 (Tier 1) or the Rule of 90 (Tier 2) to a new calculation. The new calculation requires all members (except those protected due to being within 10 years of retirement) to reach age 60 and obtain the rule of 90 to retire without an unreduced benefit.
4)It amends the disability provisions of the TFFR statute. The new proposal requires members to have five (5) years of service credit and can only draw the number of years they have worked in an approved employment position to calculate the disability benefit.
5) It requires all retirees who go back to work to pay the required TFFR contributions.
6) Finally, it adjusts the early retirement reduction. Current reduction is at six (6) percent for every year an individual retires early. The new proposal reduces benefit payments by eight (8) percent for every year an individual retires early.
What happened during the 2011 legislative session related to HB1134? In reverse order:
The Conference Committee on HB1134 has been appointed and are Representatives Grande, Streyle, and Amerman, and Senators Sorvaag, Schaible, and Nelson. On Friday April 22, 2011, they voted to return the bill to its original format. The bill was then approved by the House of Representatives on a vote of 60-30-4 and will now be sent to the Governor (see the vote here).
On Friday, April 8th the full Senate considered HB1134- the bill to shore-up the TFFR fund. During debate on the Senate floor, Senator Carolyn Nelson out of Fargo offered an amendment to remove the House amendments that prohibit school districts from paying any of the employee increased contributions. The amendments passed by a vote of 24-22 (see the vote here). Make sure you tell those Senators who supported the amendment thank you! The bill was thus amended, and returned to its original form (which was submitted by TFFR Board, supported by member and employer interest groups, and studied during the interim by the Legislative Employee Benefits Programs Committee). After additional discussion relating to the funding of the pension plan, the Senate voted on HB 1134, and passed it by a vote of 38-8 (see the vote here).
Because the House and Senate approved the bill in different forms, the bill will be returned to the House. It is likely that the House will not concur with the Senate amendments, and it will probably go to a Conference Committee to work out the differences.
Click here to see what school districts are most directly affected by the House amendment to HB1134. The average teacher in these districts could face a $60 tax increase all the way up to possibly $220 in taxes. On April 8, 2011, the Senate passed an amendment to HB1134 removing this tax increase (see the vote here).
The TFFR Study Bill has been introduced in the Legislature as HB 1134!
HB1258 is a bill that would wreck the TFFR fund and lessen benefits for future retirees. On February 18, 2011, the House of Representatives defeated this bill by a vote of 38-56 (see the vote tally here).
To help in your efforts to lobby legislators NDEA produced the document What's the cost of converting TFFR to a Defined Contribution (DC) plan?
Click here to see the list of NDEA monitored Retirement Bills and NDEA's position on each bill.
Watch the TFFR videos on the process of "Exploring Options" and the second video on "Legislative Proposals"
To see the actual bills being debated by the 2011 Legislative Assembly Click Here!
The NDEA adopted a new business item in support of the TFFR Board Proposal at the April 10, 2010 NDEA Representative Assembly. (Read the Business Item here).
What is happening with TFFR funding ratios?-See Fay Kopp's latest presentation to the NDEA Representative Assembly on April 10, 2010.
-Want to know what the TFFR Board is discussing? Read Fay Kopp's presentation to the NDEA Ambassadors on February 27, 2010 here.
-This is a presenation from Fay Kopp at TFFR about TFFR funding and the potential crisis if we do nothing.
How does TFFR work?
-What is TFFR and how does it operate?
NDPERS Specific:
SB2108- this bill would raise employer and employee contributions each by 1 percent each year for four years. The NDEA testified in support of this bill on January 13, 2011. The Senate Government and Veterans Affairs Committee amended this bill so that it only increases contributions by 1% each for only two years. This bill has been passed by the Senate and and the House Government and Veterans Affairs Committee has passed this bill out of committee without any amendments. It now goes to the House floor for further consideration. HB2018 was passed by the House of Representatives and has been sent to the Governor for his signature.
What is NDPERS Proposal?
The NDPERS Board met on March 25, 2010 to finalize its proposals for the Legislative Interim Employee Benefits Committee. The NDPERS Board has forwarded three (3) legislative proposals to the committee. No proposal makes any adjustment to the benefit structure of NDPERS. View the Bill drafts and explanations by clicking here (Bill Drafts and Explanations are on pages 2-54 of the PDF).
The three proposals are:
1. An eight percent (8%) increase in employer contributions phased in over four (4) years beginning in January of 2012.
2. An eight percent (8%) increase in employee contributions phased in over four (4) years beginning in January of 2012. The bill provides that the employee contribution increase would be pre-taxed pursuant to section 404(h). (The NDEA RA passed a resolution in opposition to this proposal, see above for explanation).
3. A four percent (4%) increase in employee contributions and a 4% increase in employer contributions phased in equally over 4 years beginning in January of 2012. Similar to #2, the state employee contribution increase would be pre-taxed pursuant to section 404(h).
The NDEA adopted a new business item in opposition to the NDPERS Proposal that incurs all of the costs on the employees at the April 10, 2010 NDEA Representative Assembly. (Read the Business Item here).
What did the market crash do to NDPERS funded ratios?
-Click here to read the latest NDPERS newsletter about NDPERS funding.
Where can I find out more information about NDPERS?
-NDPERS has a great system of webcast video recordings posted on the website. These can be found by clicking here.
Frequently asked Questions
What can I do to help?
-Click here to sign up as a Pension Protector!
-Donate to PACE
Who can fix this problem?
The North Dakota Legislative Assembly will have to make the changes through the 2011 Legislative Session and they are currently debating this legislation. You are encouraged to tell your legislators to SUPPORT HB1134 and SB2108
Is this happening in other states and how did they deal with this situation?
The National Conference of State Legislators (NCSL), a non partisan organization that tracks state legislative actions has compiled an excellent summary on what is happening in other states across the country in regards to this situation. ND is not alone and as you can we take a balanced approach in comparison to some other states. Read the NCSL report here!
Why should the state "bailout" TFFR or NDPERS when they didn't bailout individual private investments?
First, we can certainly sympathize with those who lost their "private" investments due to greed and corruption on Wall Street. However, why would we want to take away from those who can have a secure and stable retirement? That is why all Americans should have a defined benefit retirement plan as a supplement to social security and maybe their 401k like plans (defined contribution).
Second, the plans the NDEA is supporting share the pain with everybody, it does not ask for a full "bailout." In fact, the Employee Benefits Committee (a committee of legislators who review the pension plans) recommended TFFR bill, which the NDEA is supporting, does not have any direct state dollars in it. Rather it asks for increased contributions from teachers and also from school districts. In other words educators will be paying more for essentially the same or minor adjusted benefits.
Third, a defined benefit pension plan is good economics. Just like Social Security keeps people out of poverty and off of food stamps, welfare, etc... (Which are tax payer funded). Defined benefit plans like TFFR and NDPERS are far more likely to ensure that people have safe and secure retirements. In fact one study shows that 401k like plans (defined contribution) on average run out within 7 years after retirement. These people are then drawing on other forms of tax payer funded help that is usually more costly and that they likely did not contribute their own money into (see above). Also, for every dollar invested in TFFR or NDPERS in ND, the state is getting 9 dollars back in economic activity. That is a pretty good deal and why the defined benefit plan should be kept for all employees current and new. See this study from NCPERS for additional benefits of defined benefit plans
Finally, this benefit is a promise made by the state to educators when they signed up. A promise is a promise. Just like any good North Dakotan we are expected to keep making our contributions and keep our end of the promise, the state should keep its as well.
What is a defined benefit plan?
-Click here to find out what a defined benefit plan means for you and how it is better than defined contribution plans (401k like plans).
Why does my pension matter?
-Click here to find valuable information about pensions from the National Institute on Retirement Security.
I have questions about the status of the State Investment Board where can I find the answers?
- your best bet is to check the Frequently Asked Questions Link on the SIB Website. (Click here)
The NDEA Political Action Committee for Education (PACE) Fund spends money supporting candidates who support your professional and economic well being. Specifically, your PACE fund Protects your Pension. As you may know, or will soon learn, educators' pensions in ND are experiencing some hard times. The economic downturn of the last couple of years has severely damaged the funding of our defined benefit pension plans that we will rely on when we retire.
The NDEA, through its advocacy at meetings, screening of legislative candidates, and outreach to members, is actively engaged in the discussions to ensure that this promise to North Dakota's educators' pensions are protected and strengthened. One of the easiest ways you can help is to Protect your Pension through PACE! Find out how you can donate here today!
Pension Bills Being Monitored
NDEA is currently following various Retirement Bills in the 2011 Legislative Assembly. Click here to see the list of bills!
Downloads
» 1134 Testify 1-14.pdf» 2010 NDPERS Bills and Explanations_10_27_10.pdf - A list and description of the NDPERS Bills NDEA is tracking.
» 2010 TFFR Bills and Explanations_10_27_10.pdf - A list and description of the TFFR Bills NDEA is tracking.
» 2108 testimony 1-13.pdf - NDEA Testimony in support of SB2108 to resolve the NDPERS funding shortfalls
» Defined benefit vs defined contribution.pdf - Learn about the difference between defined benefit and defined contribution plans.
» HB1134 affected school districts.pdf
» hb1134 amendment.pdf
» hb1134 senate final.pdf
» HB1134 testimony_Senate.pdf
» hb1228 vote.pdf
» hb1258 vote.pdf
» July 2010 NCSL pension summary.pdf - NCSL summary of July 2010 pension changes around the USA
» NCPERS white paper.pdf - NCPERS Defined Benefits benefits
» ndpers nbi ra.pdf - NDPERS NBI NDEA RA 2010
» NDPERS_Fall_2009_newsletter.pdf - What did the market crash do to PERS funding levels?
» PERS Summary Proposals.pdf - A summary and explanation of the NDPERS Proposals.
» tffr ra nbi.pdf - TFFR NBI at NDEA RA 2010
» TFFR_4_10_10_RA_presentation.pdf - Fay Kopp's presentation to the NDEA RA on April 10, 2010.
» TFFR_How_does_it_work.pdf - What is TFFR and how does it operate?
» TFFR_presentation_to_NDEA_BOD_Jan_2010.pdf - This is the TFFR presentation to the NDEA Board of Directors from January 2010.
» The cost of converting TFFR to a DC.pdf
